Why U.S. Must Invest In Internet-Connected Infrastructure

A hybrid infrastructure that combines physical foundations such as roads, buildings and the power grid with the Internet and sensor networks will pay off for the U.S.

When you glance out the window today, the view might look about the same as yesterday. But don't be deceived -- our world is being transformed by a new, often invisible, reality. Everything from how our electrical power is delivered, to how and where we shop and pay for goods and services, is undergoing great upheaval, transforming how we conduct our lives.

Entire industries have been revolutionized by the transformative forces of digitization enabled by new consumer-oriented technologies -- namely, social, mobile, analytics and the cloud, or what we call "the SMAC Stack." Consider that MasterCard now describes itself first as a technology company and second as a payments industry leader, and little wonder, considering its success facilitating mobile commerce. Much of the disruption is invisible, as data events occur without our awareness -- thanks to transponders and digital tags -- as we drive our cars, navigate airports, walk the aisles of a store or move through our virtual workdays at home or in the office.

At Cognizant, we work with industry leaders to "run better and run different" by helping them simultaneously boost operational efficiencies and create innovative capabilities as well as ways of working that advance necessary business process and model change. These foundational changes, however, require a more holistic and unified solution, because they affect not only individual businesses but the very infrastructure that shapes our personal and professional lives.

Just as building highways and a national communications system were national priorities in the last century, it's time to contemplate how we can modernize our national infrastructure to meet today's needs and collectively extend the U.S.'s competitive edge well into the 21st century. As described in a new report from Business Roundtable, "Catalyst for Growth: America's Hybrid Infrastructure," this means building "hybrid infrastructures" that combine physical foundations (roadways, buildings, electrical systems) with SMAC-based information technology (the Internet, sensor networks and tags). Such infrastructures are needed to provide the wherewithal to support some of the most important initiatives of our time -- the smart grid, mobile payments, business cloud solutions and the Next-Generation Air Transportation System, to name a few.

Each of these initiatives -- which can flourish only on an integrated physical-digital backbone -- delivers a multitude of benefits to the U.S. economy and society as a whole. For instance, aggressive development of these initiatives will boost our global competitiveness, as U.S.-based technology and manufacturing firms become leading providers of cutting-edge capabilities. As these initiatives mature, they will increase productivity, lower upfront computing investments and encourage entrepreneurship. Individuals, meanwhile, will realize higher quality of life due to the convenience, safety and reduced energy use of these initiatives. For example, by delivering key business and technology services via the cloud, companies can quickly scale computing power and investment as operating imperatives dictate, accelerating return on investment and freeing up capital for innovation.

Connecting physical infrastructure to the Internet is a logical next step in cloud computing. IT services have been heading steadily to the cloud, but in the future, companies will begin moving more critical business processes there to seize the competitive high ground. By deploying private, public or hybrid cloud services, organizations can deliver a standardized suite of business utilities in areas such as order management and digital asset management (e.g., videos and other online content), or industry-specific functions such as medical management (in healthcare) and clinical trials (in life sciences), to employees, business partners and customers. Cloud-enabled process standardization renders key tasks more repeatable, efficient and accurate, thereby allowing capital expenditure and human resources to be focused on activities that are truly market-differentiating.

I'm always wary of the argument that "we need to invest in X so our companies can become world leaders in providing X ..." We should invest tax and private dollars to build, say, a smarter electrical grid that's more responsive to demand shifts if that grid will save companies money, burn less greenhouse gas, make industries more globally competitive, etc. I think a lot of smart infrastructure ideas have strong potential for that. But if a key piece of public-spending rationale is bolstering an industry where those kind of ROI factors aren't obvious, government is playing the role of venture investor that it tends not to do well.

Enterprise cloud adoption has evolved to the point where hybrid public/private cloud designs and use of multiple providers is common. Who among us has mastered provisioning resources in different clouds; allocating the right resources to each application; assigning applications to the "best" cloud provider based on performance or reliability requirements.